Bharat Seats Ltd Directors Report.

Your Directors have pleasure in presenting the 34th Annual Report together with the Audited Accounts for the year ended 31st March, 2021.

Financial Results

Rupees In Lakhs
Particulars 2020-2021 2019-2020
Revenue from Operations 54,766.05 58,857.47
Other Income 204.96 208.41
Profit before Financial Charges & Depreciation 2890.11 3,790.14
Less: Finance Costs 427.31 322.41
Profit before Depreciation & Taxation 2462.80 3,467.73
Less:
A) Depreciation 1,798.31 2,245.73
B) Provision for Taxation
- Current Tax 286.38 474.43
- Deferred Tax (102.46) (515.61)
- Adjustment of Tax Relating to earlier years - 11.29
Net Profit after Tax 480.57 1,251.89
Add: Other Comprehensive Income, Net of Taxes 7.92 1.41
Total Comprehensive Income for the year 488.49 1,253.30
Transfer to General Reserve - -
Balance Carried Forward to Balance Sheet 488.49 1,253.30

FINANCIAL HIGHLIGHTS AND OPERATIONS

The revenue from operations and other income for the financial year under review was Rs. 54,971.01 lakhs as against Rs. 59,065.88 lakhs for the previous financial year, showing a decrease of 7%. The profit before finance costs, depreciation and taxation is Rs. 2,890.11 lakhs for the financial year under review as against Rs. 3,790.14 lakhs for the previous financial year, a decrease by 24%. The profit after tax decreased to Rs. 480.57 lakhs, as compared to Rs. 1,251.89 lakhs for the previous financial year, i.e. a decrease by 62%. Total comprehensive income for the year decreased to Rs.488.49 lakhs as compared to Rs. 1,253.30 lakhs for the previous financial year, a decrease by 61%. This is due to decrease in sales of Car Seats to Maruti Suzuki India Limited in the face of covid pandemic and high spurt in raw material prices.

After the closure of financial year, 2020-2021, with the rampant spread of the second wave of COVID-19 and lockdowns, the sales of our Company was adversely affected in the months of April/ May, 2021 owing to shut down of the customers plants. The supplies have since resumed.

Gujarat Plant

Maruti Suzuki India Limited (MSIL) has shifted the manufacture of certain models to Suzuki Motor Gujarat Private Limited (SMG) in Gujarat. Accordingly, your Company also shifted the manufacturing of seats and carpets of a certain model in Gujarat plant, which were earlier manufactured at our Manesar/ Gurugram plants.

Total Productive Maintenance (TPM) Activity

Your company first started the TPM activity in the year of 1999 at Gurugram plant and was awarded the "Excellence Award" in 2006 by Japan Institute of Plant Maintenance (JIPM).

The Gurugram plant in 2017 started working on the next level of the award "Consistency in Excellence," with top management commitment. The Manesar plant is going for Excellence Award in 2022.

The application for the assessment for "Consistency in Excellence" was submitted in the month of December 2020 as per the timeline for BSL Gurugram Plant. With the submission of activity report in the month of February 2021 to JIPM we have come closer to the assessments for the award.

All team members of the Company are focused towards achieving outstanding levels of performance through "Manufacturing Accuracy" that meet or exceed the expectations of all our stakeholders through several focused improvement activities such as Low Cost Automation, Bottle Neck Analysis, Ideal Situation Analysis and Quality Maintenance activities.

TPM provides a holistic, structured and a quantifiable methodology for deeper & wider continual improvements in an integrated way to align to BSLs business vision.

TRANSFER TO GENERAL RESERVE

During the F.Y.2020-2021, the Company has not transferred any amount to General Reserve.

DIVIDEND

Your Directors are pleased to recommend for the approval of the shareholders at the 34th Annual General Meeting, a dividend of 25% (Re 0.50 per equity share) for the financial year ended 31.03.2021.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

a. The members of the Company are informed that the dividends that remain unpaid/unclaimed for a period of 7 (seven) years from the date of transfer to the Unpaid/Unclaimed dividend account are required to be transferred to the account of the Investor Education & Protection Fund (IEPF) Authority established by the Central Government.

Accordingly, during the financial year under review, the Company has transferred Unclaimed dividend amounting to Rs. 2,54,880/- lying with the Company for a period of seven years pertaining to the financial year ended on 31st March 2013.

b. The members of the Company are also informed that as per the provisions introduced in the year 2016, underlying equity shares on which dividend remain Unpaid/Unclaimed for a period of 7 (seven) consecutive years are required to be transferred to the Investor Education & Protection Fund (IEPF) Authority established by the Central Government.

Accordingly, during the financial year under review, the Company has transferred the following shares to IEPF Authority:

1,08,380 equity shares in respect of which dividend have not been claimed by the members for seven consecutive years pertaining to the financial year ended on 31st March, 2013, upto financial year 2019.

SHARE CAPITAL

There is no change in the capital structure of the Company.

CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business during the financial year 2020-2021 under review.

CHANGE IN PROMOTERS

As you are aware, there was a family settlement mainly between Mr. Rohit Relan and its group and Mr. Ajay Relan and its group. Brief about which has already been given on the website of the company and was also disseminated on the BSE website as per requirements of Regulation 30 of SEBI (LODR) Regulations. As a part of this settlement, Sharda Motor Industries Limited (Company belonging to Mr. Ajay Relan) has transferred their entire holding of 90,00,000 (28.66%) equity shares to NDR Auto Components Limited w.e.f. 11th April, 2020 and Mr. Ajay Relan, Ms. Sharda Relan and Ms. Mala Relan also transferred their entire holding to Mr. Rohit Relan on 24th October, 2020 i.e. 14,51,308 (4.62%) equity shares, 12,51,350 (3.99%) equity shares and 3,98,500 (1.2%) equity shares respectively. As NDR Auto Components Limited and Mr. Rohit Relan are part of promoter/promoter group, therefore, there is no change in the overall promoter holding of the company. Members are requested to refer to Note No 37(k) given in the Financial Statements for the financial year 2020-21. It is worth mentioning here that there is no change in management.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report, and forms part of the Annual Report.

CREDIT RATING

ICRA has assigned its Short Term credit rating of A2+ and Long term Credit rating of A- stable, indicating the outlook on the long term rating as Stable.

RELATED PARTY TRANSACTIONS

All contracts/ transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and are at arms length basis.

The Related Party Transactions Policy as approved by the Board is uploaded on the Companys website at the web link: https://bharatseats.com/wp-content/uploads/2020/05/policy-on-related-party-trasactions2020.pdf

The information relating to particulars of contracts or arrangements with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 in Form AOC-2 is annexed as Annexure I, forming part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014 is annexed hereto as Annexure II, forming part of this Report.

BOARD ANNUAL EVALUATION

In compliance with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and guidance note dt. 5th January, 2017 issued by SEBI, performance evaluation was carried out of the Board, its Committees and individual Directors, including the Chairman of the Board.

Nomination & Remuneration Committee reviewed the evaluation criteria for the Board, its Committees, Executive and non-executive Directors and Chairman of the Company, considering qualification, expertise, attributes and various parameters based on which evaluation of the Board has to be carried out by the Company.

A meeting of the independent directors was held, which reviewed the performance of the Board (as a whole), Committees of the Board, the non- independent directors and the Chairman.

The evaluation of Independent Directors was carried out by the Board.

This exercise was carried out through structured evaluation process covering various aspects of the Board such as composition of the Board/ Committees, experience, competencies, performance of specific duties etc. Separate exercise was carried out to evaluate the performance of individual directors, including Board Chairman who were evaluated on the parameters such as attendance, contribution at the meeting, independent judgment etc. and was found to be satisfactory.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Retirement by rotation

In accordance with the Articles of Association of the Company and relevant provisions of the Companies Act, 2013, Mr. Toshiya Miki (DIN: 07505339) is liable to retire by rotation at the ensuing Annual General Meeting.

The Board recommends his re-appointment.

Declaration from Independent Directors

The Company has received declaration from all the Independent Directors confirming that they meet the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013 read with the schedules and rules made there under along with declaration for compliance with clause 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Appointments

The Board of Directors on the recommendation of Nomination and Remuneration Committee appointed Mr. Rishabh Relan and Mr. Ashwani Aggarwal as additional directors and whole time directors w.e.f. 4th February, 2021 subject to the approval of shareholders at the Annual General meeting.

Resignations

Ms. Sharda Relan and Mr. Ajay Relan resigned from directorship w.e.f. close of working hours of 24th October, 2020. Your board place on record its appreciation for the valuable services rendered by them during their tenure as Directors.

KEY MANAGERIAL PERSONNEL (KMP)

Mr. Rohit Relan, Chairman and Managing Director, Mr. Sanjeev Kumar, CFO and Ms. Ritu Bakshi, Company Secretary continue to be the KMPs of the Company in terms of Section 203 of the Companies Act, 2013 read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

Mr. Rishabh Relan and Mr. Ashwani Aggarwal were appointed as Whole time Directors w.e.f. 4th February, 2021, for a period of three years.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements as set out by the Regulators/ applicable laws.

The report on Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 been included in this Annual Report as a separate section, along with the certificate of Mr. R S Bhatia, Company Secretary in Practice.

DETAILS OF DEPOSIT AS PROVIDED UNDER CHAPTER V OF THE COMPANIES ACT, 2013

Your Company has not accepted any deposits under Chapter V of the Companies Act, 2013.There was an outstanding loan of Rs. 2260 Lac as at 31.03.2021 from Mr. Rohit Relan, Chairman and Managing Director of the Company which is exempted as deposit under Rule 2(c)(viii) of Companies (Acceptance of Deposit) Rules, 2014.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE

There are no significant and material orders passed by the Regulators, Courts or Tribunals which would impact the going concern status of the Company and its operations in future.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Directors had laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically.

LISTING

The Equity shares of the Company are listed at Bombay Stock Exchange. The Company has paid listing fees due to the Stock Exchange.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company believes in giving back to society and we have taken steps for that. Alongside our business priorities, the Company is committed to society as well and this is apparent through our CSR activities.

Your Company believes that change is essential for growth, development and progress, and this comes through a change in our way of thinking.

Bharat Seats believes empowering Women is essential for social change and this empowerment comes through education. For the girl child we took the call of "Beti Bachao, Beti Padhao" and contributed to "Prerna" a school in Lucknow for girls from the under privileged and marginalized section of society. The school provides education and makes them culturally ready to mix and mingle with all strata of society.

Your company is also supporting a centre of skill development where our boys and girls are given training in different areas to make them employable.

Your Company is also supporting the cause of COVID 19 through Rotary Southend Charitable Trust. The Company has contributed hazmat suits manufactured by the Company to Rotary Southend Charitable Trust.

The stress and strain of life affects many humans. No matter what age or strata of society, we have cases of mentally distressed, depressed persons who require counselling from experts. We are supporting this cause through an organization "Sanjeevani". Set up in 1976, Sanjeevani is a non-profit organization addressing the mental and emotional needs of society through free and confidential counselling. Sanjeevani has helped many persons over the age of 16 years.

The CSR Policy is uploaded on the Companys website at the web link: https://bharatseats.com/wp-content/ uploads/2020/05/CSR-Policy-bsl-Final2021for-website.doc.pdf

The annual report on CSR activities, composition of the CSR committee and other prescribed details are given in the report format provided under the Companies (Corporate Social Responsibility Policy) Rules, 2014 in Annexure III.

During the financial year 2020-21, the Company has contributed an amount of ?59.01 lakhs towards CSR, aggregating to 2% of its average net profits for preceding 3 financial years.There is no amount which is lying unspent in respect of the financial year under review.

ANNUAL RETURN

Pursuant to Sec 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the copy of Annual Return can be accessed at Companys website at https://bharatseats.com/wp-content/ uploads/2020/05/1749_001.pdf.

MEETINGS OF THE BOARD

Five meetings of the Board of Directors were held during the financial year. For further details, please refer the Report on Corporate Governance given separately in the Annual Report.

AUDIT COMMITTEE

The Audit Committee comprises of four Independent Non- executive Directors, namely Mr. G.N. Mehra, Mr. P.K. Lahiri, Mr. Ravindra Gupta and Ms. Shyamla Khera. Mr. G.N. Mehra, is the Chairman of the committee.

Further, details on the Committee reference, meetings held are given in the Corporate Governance Report. Powers and Role of the Audit Committee are included in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act,2013, the Directors confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same.

(b) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at 31st March, 2021 and of the Profit of the Company for the year ending 31st March, 2021.

(c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) The annual accounts have been prepared on a going concern basis.

(e) Internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively.

(f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

PARTICULARS OF EMPLOYEES

Disclosure as required under Sub Rule 2 of Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as Annexure IV.

The ratio of the remuneration of each Director to the median employees remuneration and other details in terms of Sub Section 12 of Section 197 of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as part of the report as Annexure V.

COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS AS PROVIDED UNDER THE COMPANIES ACT, 2013

The Company has formulated a Nomination and Remuneration Policy which is available on the website of the company. The link of the same is https://bharatseats.com/wp-content/uploads/2020/05/NRCPolicy2020.pdf. Other details are provided in Corporate Governance Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

There was no transaction falling under the provision of Section 186 of the Companies Act, 2013 during the financial year under review.

RISK MANAGEMENT

The Company has in place the Risk Management Policy to identify and assess the key risk areas and monitor the same. The Board periodically reviews the risks and suggests steps to be taken to control the risks.

VIGIL MECHANISM

The Company has in place an established Whistle Blower Policy. The Audit Committee and the Board periodically reviews the policy and its implementation. The purpose of this policy is to provide a framework to promote responsible whistle blowing by employees.

The Whistle Blower Policy may be accessed at the Companys website at weblink:https://bharatseats.com/wp-content/ uploads/2020/05/whistle-blower-policy2020.pdf

HUMAN RESOURCES

Our relations with the employees are very cordial. Your Directors would like to place on record their appreciation of the commitment and efficient services rendered by all employees of the Company, without whose wholehearted efforts, the overall satisfactory performance of the Company would not have been possible.

AUDITORS AND AUDITORS REPORT

(a) Statutory Auditors

M/s S.R. Batliboi & Co. LLP, Chartered Accountants, LLP, (ICAI Firm Registration No. 301003E/E300005) was appointed as Statutory Auditor at AGM held on September 21, 2017 will hold office till the conclusion of Annual General Meeting to be held in the year 2022.

The Auditors Report given by M/s S.R. Batliboi & Co. LLP, Statutory Auditors on the financial statements of the Company for the year ended March 31, 2021 is part of the Annual Report. The Auditors Report does not contain any qualification, reservation or adverse remark. During the year under review, the Auditors had not reported any matter under Section 143(12) of the Act, therefore, no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

(b) Secretarial Auditor

In accordance with the provisions of the Section 204 read with the Companies (Appointment And Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit was carried out by Mr. R. S. Bhatia, Company Secretary in Practice for the financial year 2020-21. The report of Secretarial Auditor for the financial year 2020-2021 is annexed herewith marked as Annexure VI to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Pursuant Regulation 24A of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company has obtained annual secretarial compliance report from Mr. R S Bhatia (C P No. 2514), Company Secretary in Practice and the same has been submitted to stock exchange within the prescribed time limit. The annual secretarial compliance report does not contain any adverse remarks and qualifications.

SAFETY

Safety first is our motto. While the laws makes it mandatory for us to adopt benchmark practices, our values drive us towards this objective.

With the regular guidance from the Safety Team of Maruti Suzuki India Limited, the Company is now among the leading companies which have made safety its culture.

Well trained staff, focus on best practices & aided with installation of state of the art Aerosol fire Detection & Suppression system across locations have worked at force multipliers in our Journey.

Besides this the environmentally friendly practices, fire extinguishers, thermography test, adherence to NBC 2016, NOC from fire office & regular third party inspections speaks of the commitment.

The review mechanism monitoring & mock drills happen periodically & monitored at APEX level. Last but not the least SHE (Safety, Health & Environment) training is regularly imparted to all the employees.

EFFECTIVE MANAGEMENT SYSTEMS

The company is system certified for IATF (International Automotive Task Force) 16949 for quality, ISO 14001 for environment and OHSAS for occupational health and safety. BSL is also accredited with ISO/IEC 17025:2017 "General Requirements for the competence of Testing & Calibration Laboratories". Our Manesar, Gurgaon and Bhorakalan Plants have been certified as Comprehensive Excellence "Green" Plants by Maruti Suzuki India Limited.

Your Companys focus on preventive maintenance and effective mitigation of all the likely risks involved, has led to safe and healthy working environment for all employees thus helping them to perform at their optimum level of competence.

ENVIRONMENT

Through OHSAS (Occupational Health and Safety Assessment Series) & ISO 14001, we are committed to work on continuously improving both Human Safety and Plant safety & Environment through: -

- Management of Safety & Environmental Risks through proactive risk mitigation planning. (Hazard Identification & Risk Assessment (HIRA) and Operation Control Procedure (OCP) Compliance to all safety & Environmental Regulations

- Focus on optimum use of Energy and Reduction of waste.

- Effective handling and waste disposal.

- Focus on "Zero accidents"

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has constituted Internal Complaints Committee (ICC) known as Prevention of Sexual Harassment (POSH) Committee to enquire in to complaints of Sexual Harassment and recommend appropriate action. The Company has not received any complaint of sexual harassment during the financial year 2020-21.

SHARES

a. Buy Back of Securities

The Company has not bought back any of its securities during the year under review.

b. Sweat Equity

The Company has not issued any Sweat Equity Shares during the year under review.

c. Bonus Shares

No Bonus Shares were issued during the year under review.

d. Issue of Shares with differential voting rights

The Company has not issued any shares with differential rights during the year under review.

e. Issue of Shares under Employee Stock Option Scheme

No such issue of shares under employee stock option scheme was made.

f. Issue of shares through private placement - Nil

g. Issue of Shares without differential voting rights - Nil.

ACKNOWLEDGEMENTS

The Directors place on record their deep appreciation of the valuable assistance and co-operation extended to the Company by Suzuki Motor Corporation, Japan, Maruti Suzuki India Ltd., Suzuki Motor Gujarat Private Limited, Suzuki Motorcycle India Private Limited, Toyo Seat Co. Ltd., Japan, Inoac Corporation, Japan, Hayashi Telempu (Thailand) Co. Ltd., Yes Bank Ltd., HDFC Bank Ltd., various departments of Central Government and Government of Haryana. The directors convey their deep appreciation to each and every employee for her/his efficient service, commitment and collective team work.

Your support as shareholders is greatly valued.

Your Directors thank you and look forward to the future with confidence.

For and on behalf of the Board
Bharat Seats Limited
(Rohit Relan)
Chairman and Managing Director
Place : Gurugram
Date : July 27, 2021